indyank - 4:16 pm on Jul 24, 2012 (gmt 0)

diberry, on reading your story I do get the feeling that your site's main trouble is with those extenal links to it.

1) a mix of small blogs putting my site in their sidebars - this would have definitely landed you in trouble, more so if they weren't branded links.
2) Blogs, except the high profile ones, have in general been devalued a lot by the Google animals. So, if your main source of links were blogs and a few or most of them were victims of the Google animals, your site would have been definitely affected indirectly as well.

I am wondering if you guys think that backlinks are a component of the Panda algorithm along with other factors or is this only a part of Penguin?

As I have already mentioned elsewhere on webmasterworld, this is my take. Panda is definitely about links and their characteristics too and not just about content. Penguin is predominantly about backlinks and to a small extent about spam (not just low quality) content.